One of the most senior officers in the Salvation Army has told an inquiry that a confessed child sex offender was kept on at a women and children's shelter, despite clear policy that sex offenders should not be working with children.

Salvation Army Commissioner James Condon has given evidence at the Royal Commission into Institutional Responses to Child Sexual Abuse about the case of Major Colin Haggar.

The royal commission has heard that Major Haggar admitted in 1989 to indecently assaulting an eight-year-old girl in a town in central western NSW.

Major Haggar was stood down the following year, but the town where the abuse occurred and other Salvationists were not told what happened.

In 1990, Major Haggar told Commissioner Condon he wanted to go to the police and confess.

The royal commission heard that although the organisation had dismissed Major Haggar, no-one from the Salvation Army had notified the police.

Commissioner Condon had previously met the Haggars at a Salvation Army college, and had acted as their pre-marital counsellor.

Questioned by the counsel assisting, Simeon Beckett, Commissioner Condon said he went with Major Haggar to report the incident.

Simeon Beckett: Did he tell the police officer the name of the child?

James Condon: No, I don't recall him telling them.

Simeon Beckett: Did he tell them the name of the family?

James Condon: No, I don't recall him telling them the name of the family.

Simeon Beckett: Did he tell them the location where the offence took place?

James Condon: No, I can't say for sure that he did.

Simeon Beckett: What was the response of the police officer?

James Condon: The police officer, as I recall it, in general terms, said 'there's nothing we can do about that unless the girl or her family report it to us.'

Simeon Beckett: Commissioner, you'd understand that Mr Haggar was effectively - was, in fact, admitting that he had engaged in a criminal offence?

James Condon: Absolutely, that's why we were there.

Simeon Beckett: That would have been sufficient of its own to take further action by the police.

James Condon: One would have thought so, yes.

Commissioner Condon said he was very surprised that police did not take further action.

But he said it did not occur to him to make any notes of the report, or to tell anyone in the Salvation Army that Major Haggar had gone to police.

Major Haggar faced no charges and was reinstated as an officer in 1993.

When his wife Kerry Haggar was promoted to the church's executive, Colin Haggar was promoted alongside her, according to the rules of the organisation.

Commissioner Condon says he wrote to the leadership in London appealing against the move, but was told that Kerry Haggar could not be promoted alone.

In 2007 the Salvation Army issued a minute saying no-one who was convicted or cautioned for a sex offence could be considered as an officer of the Salvation Army.

However, the minute did not apply to Major Haggar.

Simeon Beckett: You'll see there at 'C' that "those offenders we will call category one offenders include persons believed to have offended against children."

James Condon: Correct.

Simeon Beckett: And Mr Haggar would, in 2007, have fallen into that category?

James Condon: Yes. Keep in mind I said earlier that minutes were not retrospective.

In April 2013, after the royal commission was declared, at Commissioner Condon's request a message was sent out to all Salvation Army corps requesting them to report any historical child sexual abuse.

By then, Major Haggar was in charge of a shelter for women and children.

Commissioner Condon said as a result, new, separate sets of allegations against Major Haggar were received.

Major Haggar denied those additional allegations, the commissioner told the inquiry.

Commissioner Condon said he decided to retire Major Haggar from his position as an active officer of the Salvation Army in October last year.